Bi-weekly and weekly payments

Most mortgages have the option to allow payments to be made on a weekly or bi-weekly basis. This option may be desirable for two reasons. The first is it can save you money as you can expect to pay off your mortgage about 4 years sooner. This can save you dramatically over the life of your mortgage. The other reason why these options are so popular is that if your employer pays you on a weekly or bi-weekly basis, you can simplify your budgeting by making the payment line up with the way you paid.

Making Extra payments

Paying extra amounts on your mortgage can make a big interest saving over time. When we select a mortgage company, privilege payments options are something that we look for. A 20% privilege payment will allow you to pay off up to $20,000 per year on a $100 000 mortgage. It is important that the privilege payment also be flexible to allow you to pay smaller payments on the mortgage and as often as you wish. An extra $1000 periodically paid on a mortgage can help you become mortgage free faster.

Reducing the CMHC fees on your purchase

When you require a mortgage for more than 75% of the purchase price of a property, that mortgage must be insured by Canada Mortgage and Housing (CMHC) or GE Mortgage insurance. The premium charged by these company`s decreases as the down payment increases. When you finance your property at 95%, a premium of 2.75% is added to the mortgage. By increasing the down payment to 10% of the purchase price the premium can be reduced to 2.5%. If you can put down 25%, you can avoid any additional insurance fee. Depending on your situation there are ways that you can structure this financing to avoid the CMHC or GE insurance premium.

Advantages of Bigger Down Payments

As mentioned above, when you put a 25% down payment on your purchase you can avoid the CMHC premium. More importantly the larger the down payment, the lower the amount of interest you will pay over the life of your mortgage. It is important to note that it may not be wise to stretch yourself to increase your down payment and end up borrowing on credit cards or a line of credit at a higher rate.

Short Term Rates vs. Long Term Rates

The options for mortgages available can be very confusing for most mortgage shoppers. Terms for mortgages vary between variable and fixed rate, 6-month terms to 10 year terms. Taking a variable or floating rate mortgage can have savings. Typically the shorter the term or guarantee of the rate, the lower the rate will be. This does not always happen, depending on the market place and the economy, but history has shown that short-term rates tend to be lower than long-term rates. The up side of variable rate is the strong potential for interest rate savings. The down side is the fact that you are accepting the interest rate risk without a guarantee. If you are considering a variable rate mortgage you need to look at your own risk tolerance, and your cash flow available to deal with potential increased payment. Considering projections of rates and where we see interest rates heading can also be important in this decision. Make sure you talk to an expert when you are making this decision.

Housing prices will remain strong in 2008

Housing Prices will Remain Strong in 2008

Existing home sales as measured by the Multiple

Listing service (MLS®) are expected to increase

during 2007 by 7.6% to approximately 519,722

units, surpassing the previous record level of

483,344 set in 2005. In 2008, MLS® sales are

expected to decrease by 3.9% to 499,650 units

reflecting moderating demand due to rising

mortgage carrying costs. Despite this forecasted

decline, MLS® sales in 2008 will be at their

second highest level on record. During 2009,

continuing moderation is expected with growth

falling by 2.3 per cent to 488,300 units.

The average MLS® house price is expected to

grow by 10.6% for 2007, to about $306,000 as

strong sales in Western Canada continue to put

pressure on prices. In 2008, existing home

markets will become more balanced and price

pressures will begin to ease. The average MLS®

price will increase by 5.2 per cent to about

$322,000 in 2008. Looking ahead to 2009, the

average MLS® price is forecast to increase by

3.8% to approximately $335,000. For more

information on this and your local market, please

visit www.cmhc.ca today!

*Seasonally adjusted annual rates

Source: CMHC April 8, 2008 News Release

Did you know.

That there is an uneven access to acceptable

housing across the household income spectrum?

Between 2002 and 2004, the 20 per cent of

Canadian urban households with the lowest

incomes were still facing serious difficulties in

finding acceptable housing. The incidence of core

housing need among low income households

remained steadily high with at least 56% of these

households unable to access acceptable

housing. The percentage of low-income

households among urban households in core

housing need increased from 77.7% in 2002 to

80.6% in 2004.

Source: 2007 Canadian Housing Observer

Key Partners Get the Upper Hand

One of the ways we give the Upper Hand to our

Key Partners and their clients is through Home

Buyers Seminars. Below, Rodney Shahbaz, Lisha

Dodsworth and Michael Medland stand beside a

marketing board at a Mississauga seminar for new

home buyers.

Seniors as a Growing Market Segment and

Housing Options available to Them

A well-known fact amongst the general Canadian

public is that seniors are a fast growing segment of

the population. Perhaps surprising about this

demographic is their potential as a player in your

local housing market. From 1991 to 2001, the

number of people aged 65+ in Canada increased

at more than double the rate of the general

population, with growth of this group expected to

keep accelerating up to and beyond 2011.

Although the incomes of seniors are lower than

those of the working-age households, many

seniors have substantial equity in their homes. In

2001, 71.2% of senior households owned their

homes (compared to 65.8% for all households).

With home equity and an average net worth over

$300,000, seniors are more and more exploring

different housing options and amenities available

to them. You can receive more valuable

information about this market segment and others

by referencing CMHC.s Canadian Housing

Observer today!

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Canadian Mortgage Consumers Manage their Debt Responsibly

There are many convenient ways to pay off your mortgage sooner. The faster you pay off your

mortgage, the less money you.ll spend on interest. Here are some tips to help you get mortgage-free

sooner:

• Make more frequent payments

• Make the largest payments you can afford

• Use your salary bonuses and tax refunds to pay down your principal

• Choose a shorter amortization period

• Keep your payments the same, even if interest rates drop

Increasing your mortgage payments by just 15% and switching to a bi-weekly payment schedule can

make a big difference to your mortgage term. Even if you start with a 40-year amortization period,

this strategy can help you be mortgage-free years ahead of schedule

Scotiabank Mortgage Payment Options:

15% + 15%® privileges - Pre-pay up to 15% of your original principal each year and increase your